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July 23, 2015

Logging baron claims tree-felling days over

Logging magnate Try Pheap talks to Post reporters at one of his plantations in Preah Vihear province

on Sunday. Heng Chivoan

May Titthara and Daniel Pye
Preah Vihear province, Tue, 21 July 2015

Try Pheap wants to turn over a new leaf.

In an exclusive interview with the Post at the opening ceremony of his vast plantation in Preah Vihear province on Sunday, the media-shy tycoon spoke of a desire to cultivate a new image – a rags-to-riches account of a man who now wishes to give something back – and pledged to end his companies’ logging activities.

Philanthropy and charity are what he would like to be remembered for, rather than the gutting of Cambodia’s last remaining woodlands, for which a global watchdog dubbed him a “timber gangster”.

“As a Cambodian, my life was difficult. I was born in Kandal province’s Kandal Stung district.… I would climb palm trees and the skin on my chest would chafe. I was paid 3 riel to pick fruit from one tree, because I was a farmer.

“For my struggle to become an oknha and form the Try Pheap Group, I owe a deep debt of gratitude to [Prime Minister] Hun Sen and his wife, who trained me,” he says, using a title bestowed on businesspeople that have made donations of more than $100,000 to the country’s development.

“The success of the company is the success of January 7,” he adds, referring to the date in 1979 when Vietnamese and anti-Khmer Rouge forces invaded Cambodia to evict the totalitarian administration in Phnom Penh.

Try Pheap (centre) talks with attendees on the weekend during the inauguration of an administration building at his plantation in Preah Vihear province. Heng Chivoan

“It is not because I am a [Cambodian People’s Party] member and talk about CPP policy [that I am successful], but it’s true that I was successful because of the [CPP coming to power],” he says.

“There are so many tycoons and barons now; it’s not just me. I am a small-timer, but I became famous from the national deforestation business. I would not be well-known if I did not do this business, because I’m just an oknha who does not have a lot of money.”

Despite his claims of a relatively meagre fortune, Pheap has vast and growing interests in Cambodian real estate, including casinos, hotels, plantations and urban developments. He says he spends $7.2 million annually on his company’s staffing costs.

The 50-year-old walks with purpose and confidence, but with the gait of a farmhand rather than the saunter often associated with the moneyed upper class.

The road to his provincial company headquarters was lined with CPP youths, marshalled to applaud his entrance by their supervisor, as he arrived at the plantation with Environment Minister Say Sam Al and a group of Thai agribusiness figures.

A band played Khmer pop songs in the morning drizzle as the delegation took their seats on stage, before ducking for cover after the chairs were filled. Medals were handed out to the visiting dignitaries.

Speeches were given before lunch was laid out for the CPP volunteers – along with generous helpings of beer – in the newly inaugurated administration building.

Sitting next to his son, Oknha Try Daluch, and Okhna Ouk Kimsan, a former Conservation International staffer now in charge of his Preah Vihear operations, Pheap said he wanted to be remembered as a taxpaying businessman who invested in Cambodia’s future.

“How can I have such a huge amount of money when I am just [50]? Before I die, my legacy will be rubber plantations, pagodas and schools for the next generation. That’s why I develop the land.”

“If I really annihilated the forest, I would not have to pay tax. We would just transport [timber] and sell it without paying tax; that is forest destruction,” he says, his diamond-encrusted gold watch swinging freely around his wrist.

“We are a company and we are not corrupt because we do our business with integrity and in the service of Cambodia. While we are logging the forest and growing rubber trees, it turns the country green again. We have to understand the facts; we have to feed tens of thousands of people to reduce poverty.”

On show on Sunday were the fruits of this investment: thousands of hectares of rubber trees, which are expected to be tapped in 2017, and a 170-hectare pepper farm.

But the allegations he is defending against are unlikely to go away overnight.

Last year, the Post revealed how Forestry Administration and Ministry of Environment officials had recorded an estimated $220 million of rosewood logged in the Central Cardamoms Protected Forest and the Phnom Samkos Wildlife Sanctuary over three years.

When one of Pheap’s company directors revealed the tax data for that operation, it showed that, in fact, his companies had raked in even more from the concession to clear the Stung Atai hydropower dam site – about $310 million – despite a major conservation group estimating that there was only about $15 million worth of rosewood to cut.

“Related to the criticism that I am a forest destroyer, in my opinion, I am over the moon to be attacked like this. If we get angry, we will grow old quickly.… I would not be famous without this criticism. At the end of a tall tree, the wind still blows.”

He says his companies pay about $90 million in tax annually, with between 50 and 300 shipping containers loaded with timber and transported to China each month. Many of the containers leave via Sihanoukville Autonomous Port, export records obtained by the Post last year show, and Hong Kong-based Kin Chung Transportation handles all shipments, though it has denied any business dealings with Pheap.

“We use capital to buy timber from people clearing concessions, paying from $700 to $1,000 per cubic metre, and we sell it for $2,500 to $3,000 in China. But we have to pay export tax, harvesting and transportation costs, so we only make $300 on a cubic metre,” he claims.

“My exports have never gone through Vietnam,” he says, adding that all timber harvested from Cambodia’s forests is transported by land to Phnom Penh and then shipped overseas.

“Corruption is going to happen, but I have not bribed any officials. If lots of people are allowed to bid [for government-held timber], it can be against the national interest. So I go to bid directly … but it is expensive.”

Pheap maintains that if he did not log and collect timber to fund his $5.6-million showroom in Kandal province’s Ang Snuol district – a museum of sorts dedicated to the very trees he is accused of uprooting – or to invest in plantations and other projects, the forest would be gone regardless.

“But in 300 years, the trees will still be [in the museum] . . . All kinds of timber will be displayed in the museum . . . and all Cambodians who do not know about the trees can go there to study.

Foreigners have visited and they realise that they are looking at priceless Cambodian assets.”

Despite saying he is unbothered by it, Pheap says the criticism has gone too far, and to avoid further accusations of illegal logging, he will not seek to acquire new land.

“I will stop logging and plant rubber trees and fulfil my role, with 9,900 hectares [in Preah Vihear] and another 5,000 hectares of land in [Pursat’s] Veal Veng district. I have stopped logging already for one year.”

“They attack Samdech [Hun Sen] because he is strong. Try Pheap does business and we are attacked. If we had a bad name, we would be jailed in Prey Sar prison . . . We do not care what they [NGOs] say.